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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Grover 12, Boehner 12, Syria 11, Us 7, U.s. 7, Texas 5, Florida 5, Jim Muriel 5, Hp Moonshot 4, California 4, Jackson 4, John Boehner 4, Grover Norquist 3, America 3, Washington 3, Arizona 3, North Carolina 3, New York 3, Libya 3, Christie 2,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    August 23, 2013
    7:00 - 8:00pm EDT  

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path to prosperity. never forget, health and disability insurance, 50% of the bankruptcies are caused by that. i'd like to say there's always a bull market somewhere, i promise to try to find it a double shot of good news for the markets to finish the week. first, house speaker john boehner promises not to shut down the government. that's a positive for stocks. second, the news out of jackson hole economic conference decidedly dovish. that soothes the market taper fears just a bit. the result, a decent gain for stocks while interest rates fell sharply today. however, uncertainty still rules the day when it comes to syria and what the u.s. should do about escalating fighting and chemical weapons use over there. president obama seems very conflicted about what to do, and i'm not sure i can really blame him, but more and more cities
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and states are blaming obama care for cutting their government worker jobs and work hours. this ill-advised health care law is likely to cut more private sector jobs than the budget-cutting sequester. all of that and more coming up on "the kudlow report" coming up right now. ♪ ♪ ♪ first up tonight's speaker of the house john boehner says republicans will not shut down the government over obama care. cnbc's john harwood has that story for us. good evening, john. >> reporter: congress returns in just over two weeks to a huge fight over government spending and debt. with no agreement in sight between the white house and congressional republicans, both sides are trying to prepare the ground for the battle and the economic bus tour president obama today tried to rally public opinion against a possibility of a government
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shutdown aimed at his health care law. most recently there's been threats that we would shut down the government unless we agreed to roll back the health care reform that's about to provide millions of americans with health care coverage for the first time. and that's not an economic plan. >> on a conference call with fellow republicans, house speaker john boehner says he plans a short-term funding bill once the fiscal year runs out next month. in doing that the speaker aimed to discourage members from seek a shutdown because he and other republican leaders fear it would backfire politically. that still leaves the question of what to do later this fall on the debt limit which some conservatives want to use as leverage against obama care, too, but that raises a more difficult risk, not just political damage, but economic damage as well, larry. >> all right. now, the other big market story today, maybe the fed taper isn't coming up so fast. that seemed to be the message coming from the big conference in jackson hole, wyoming. >> steve liesman is live in
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jackson hole. he interviewed several of the federal reserve members. steve, what can you tell us? >> good evening, larry, from jackson hole, there are differing opinions from fed officials about the next steps for the central bank. we interviewed three federal reserve banks today and we got three differing opinions. one group, dennis lockhart from atlanta suggest many the fed could, in fact, taper in september. >> the way i'm thinking of it at the moment is i'm actually looking at the data and asking if they deny or in some way undermine the basic outlook that i have in place. on that basis, then i can get comfortable with the move in september of some time. >> i do think if the data continue to progress as we've seen, and i do agree that we should edge down or taper or purchase later this year. >> but jim from st. louis, he had another opinion. he thinks the data is sht clear enough and he thinks the federal reserve ought to wait. >> i don't think we have to be
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in any hurry in this situation. if the place is running low and we have mixed data on the economy. so, you know, i would be cautious. i would notn't to pre-judge the meeting, but i think we want to take our time, assess what's going on before we make a move here. >> among the research papers is one by noted economist robert hall who said one of the biggest mistakes the central bank could make was to withdraw stimulus too soon. there's debate over the effectiveness and no consensus emerged here, larry. back to you. >> great reporting and we appreciate all of that. stay with us, please. our question now is how does this impact your investment portfolio. let's ask our pros and jim muriel director of tjm institutional services. >> he's with macro chief investment rf and let's welcome cnbc's newest financial mastermind dominic chu.
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mastermind. >> i have to work to deserve that particular title, larry. >> all right. we've lost steve liesman at least for the moment, and i think there are storms in jackson hole. i want to go to my friend jim muriel for starters, because i'm on the camp, and the stanford economist and the national bureau of research and i don't think there's any hurry and i don't see a second-half rebound and i don't think the economy is even remotely strong and therefore, jim muriel, i don't see what the rush is. why not at least wait until december when they have a better handle on things. >> i think what we saw today that housing number was bad this morning and when you look at the housing which is arguably the most highly correlated to changes in interest rates and we've seen mortgage applications trend down while existing home sales have been doing quite well and some will tell you that mortgage applications is the most forward looking because there is a 60-90-day lag time in
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the indicator and now we see the new home sales which is terrible and makes us think that perhaps existing home sales will crumble fairly quickly, too. so i changed my mind today thinking they'll taper in september or october, but they don't make decisions like traders do. i'm sure they're looking at it right now thinking what are we supposed to do. i think they'll come to the conclusion that it is too early. >> you changed your mind today and you changed your mind on the basis of the new home sales, is that correct? >> that was a bad number. >> a little flimsy number. a little flimsy number for the existing home sales. >> i wouldn't normally hang my hat totally on the new home numbers and i was looking at housing because of the divergence between mortgage applications and existing home sales. dominic chu. first off, does the stock market want the fed to wait, hold back on the taper or not? >> there is a debate about that. >> of course, is good news good news or is good news bad news?
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good news used to be this idea that maybe it would make the fed want to taper and take the foot off of the accelerator. you see interest rates start to cell accelerate and what's interesting is your comment and the inflation picture in this country is not there. >> cpi is, what? 1.2%, maybe along those lines and there is no real fear. the real fear for these central bankers all over the world is deflati deflation. what if we go into the price spiral to the down side. what does that mean for the markets? that could be devastating and what you're seeing for the stock market right now is an orderly decline. we're not seeing that panic that we see during the debt downgrade or anything else with regard to the market volatility and that's the reason why it's important and this is not exactly a panicked sell-off in the markets and they're still doing pretty well. >> the corrections come and go. >> this one doesn't look like much of a big correction yet. >> but what happens if they hold back until december? i want to get to the government shutdown stuff, too, because i
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think that's going to be very important and just on the fed's story, what about what robert hall said? the biggest danger is tightening too soon. >> anybody can say that, larry, because that's just what the word too means. there's a danger in tightening too, yellow, too green or come on, you don't have to make a ph.d from stanford to make a stanford like that. go back to the beginning of 2009 when the fed started its first asset purchases and it started them, it stopped them and it started them again and it's done different sizes and gone on hiatus, come back. you cannot find any robust, correlation that will satisfy anybody that any of this stuff they've done other than the very first mortgage-backed security in 2009 have made any difference to anything. ben bernanke started talking about tapering on may 22nd. the stocks had a 5% or 6% correction. now they've had a 3% or 4% correction.
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oh, come on. >> this taper thing doesn't matter. >> the tapering thing does matter. if you were pulling the levers are you saying that they should move back quickly from stimulus and you wouldn't think that would cause some sort of panic? >> they've been talking about tapering since may 22nd. >> there's no evidence that it makes any difference. >> i agree. that's just the thing we talking heads can say and there's no evidence and any of the stuff they've done. so did it bigger or do it smaller, who cares? >> you don't know the counter factual and what would have happened if they didn't do it. dominic, i'll just say this. i don't think the federal reserve affects unemployment and real gdp and those kinds of variables. i don't think that's what they do and those are tax and regulatory and fiscal issues, but here's what bernanke did. i think he poured in a lot of cash and i may not like the way he structured the portfolio, but whatever. the demand for cash in a deleveraging society, the demand
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for cash when people didn't want to take any risk and were totally risk averse, following the great recession and the sell-off of '08 and i think bernanke finally figured out that we need cash, banks want cash. consumers want cash. i think that's his singular contribution. the demand for cash. he supplied it. >> it's not just that. what we have is the supply out there for it, but now you have to see the demand for the cash pick up, right? what jim's point about the new home sales it is important because it is one data point that this is a u.s. housing recovery. it's modest and not gangbusters, but it's going along. will it continue if there still is this idea that interest rates are headed higher and there isn't that demand there. will rates on the rise zap that demand. >> actually, i'd be a bare of bonds now and nobody believes me. i would be a buyer of bonds for about 50 or 60 basis points and that's short-term stuff. i'm not a short-term guy, but i think rates went way too far.
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don luskin, no government shutdown and a very important point. boehner made it very, very clear in a conference call to the republican conference and he's got the votes. there's a letter circulated about defunding obama care and threatening a shutdown. only 80 republicans signed it. 153 did not sign it, don, and even more now are saying argue for delay and not for defund. stay away from the shutdown. we're going get through the end of the year with this. that's got to be bullish for stocks. >> it is. let's just say that it's not bearish because i actually don't think that the stock market ever expected anything else. the republicans have done nothing, but kind of keep their lips zipped all year. they've had the opportunity to go ballistic about benghazi and the irs and the nsa, and they've suspended the debt ceiling in february and they learned their lesson and they'll stop yapping about legitimate rate and
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shutting down the government and all of that stuff and they'll guide into a classic midterm election where they'll make gains in the senate and gains in the house and then they'll go into a classic presidential election in 2016 when history teaches us that pretty much, every two terms the white house changes party. it is the gop's term and it is president christie's turn. all they have to do is shut up for the next three years and that is their policy. they know that. that's not bullish this year, that is so bullish for 2016. >> okay. 2016. >> but jim muriel, i'll just say this. we'll have a more detailed discussion of obama care and the republicans' fiscal policy later in the show, but i'll say this. no shutdown means you will have an orderly situation come this fall. that's got to be good. >> boehner and cantor will not want to fiddle with the debt ceiling and that's got to be good. you know what else, jim muriel? my last point and i want to get your take. boehner said today, it was not reported, but he said they are
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going to keep the sequester. the spending cut sequester. me, i think lower spending is good for free market capitalism and it's good for entrepreneurship. obama hates the sequester, boehner said we're going keep the sequester. boehner's playing with a good hand here. he's got an inside straight. obama will get whooped on this, and i think that's very bullish. you've got the last word. >> wait, was that a question because that was everything i said. i can't help myself. >> just say yes, jim. >> yes! and the market does not act scared. the sequester was the end of the world if you would have sold stocks on that you would have lost. >> sequester was bullish and it is a shared gdp is bullish and the smaller government is bullish and getting government out of the way is bullish. free market prosperity is bullish. i have to get out of here. don luskin, dominic chu will come back and give us news later on. we appreciate it, but now
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president obama doesn't seem to be at all certain to syria's use of chemical weapons. you know what on this one? i can't say that i blame obama. you know why? americans do not want more foreign war commit ams and we'll get the latest on the syrian situation and what the president is saying just ahead and just in case you missed it. let me repeat, free market capitalism is the best path to prosperity and that includes lower spending which happens to mean keep the sequester alive. i'm kudlow, and i want to cut spending. i'll be right back. i am today by luck. i put in the hours and built a strong reputation in the industry. i set goals and worked hard to meet them. i've made my success happen. so when it comes to my investments, i'm supposed to just hand it over to a broker and back away? that's not gonna happen.
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>> the obama administration is still looking into whether syria's military used chemical weapons in an attack on civilians earlier this week. let's bring in nbc news' steve handelsman. good evening, steve. what can you tell us. >> reporter: critics in washington are complaining that president obama delaying any u.s. military response, if, in fact, he ever orders one and is giving a green light to syria's government to use chemical weapons again, but that wait
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might -- might soon be over. here is a clue from former top obama adviser david axelrod who is still wired in the white house from chicago. axelrod said today he expects the president will take action. maybe a surgical strike says axelrod, maybe setting up a no-fly zone and maybe setting up a possible cruise missel strike and the president himself suggested that now, u.s. national security is at stake. he says if chemical weapons were used, the u.s. forces in the region, not clear exactly which forces he's talking about might be in danger and the president cited a worry about proliferation, spreading chemical weapons. presumably that could happen and by the rebels seizing chemical weapons and turning them over to al qaeda. here's what he said on cnn. >> there is no doubt that when you start seeing chemical weapons used on a large scale
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and again, we're still gathering information about this particular event and it is very troublesome. >> still, the president is reluctant to act. again, citing the lessons of iraq and afghanistan. >> folks will call for immediate action, jumping in to stuff that does not turn out well. >> so, larry, the commander in chief met yesterday with his national security team. he'll do it again in the future and the white house won't say exactly when and he will try not to make this thing look and sound too urgent. he has reportedly asked for targeting options and the pentagon would already have those. he's asked that they be updated and the white house, no surprise in this, has said again, larry that even if an inspection team gets in and even if there's verification that chemical weapons were used and one thing the president will not order is u.s. forces, ground forces to go into syria. >> well, let me ask one quickie,
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steve, on this. >> yes. >> if some military action is taken will the united states take it on its own or working with allies in europe or will the president insist on going through the united nations where our own ambassador didn't even show up for a meeting a couple of days ago? >> you know, i think, and this is me saying this based on the president's previous performance on things like this, he is so reluctant and especially reluctant to go the ouz its own, to go alone. you'll remember in libya, the u.s. military involvement was in concert with the brits, with the italians and with u.n. mandates. there's nothing like that now in syria. the russians who have a veto, you know, in the security council have sided with bashir al assad and they've put missiles in syria which would make it really tough to have a no-fly zone, but let's put that aside. i think the educated guess from washington is, larry, no going
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it alone. no going it without some kind of a legal cover and absolutely no rush by president obama to make a decision. back to you. >> no rush. thank you, steve handelsman. thank you ever so much. >> welcome my free market friday panel. i'm going ask you, are you satisfied with president obama's situation in syria so far. here hoo is for the rest of the hour is aldin. did i get it right? >> roy, senior fellow at the manhattan institute and my good friend mark simone. >> ahmed, what do you -- what do you want obama to do? before we get into the prognostication of what he will do, what do you want him to do? >> i want obama to actually put his money where his mouth is. i want him to stop the empty rhetoric now for two and a half years. he's been speaking and his words have gotten ahead of him -- his actions as well.
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i mean, come on in august 2011 we all saw he called for president bashar al assad to be ousted and he had no strategy for that and he made that call and he said a year ago the game-changing red line and it's embarrassing that he's unable to act on that red line and for as much that we're seeing that the russians are an obstacle and you saw them go into an independent probe. >> but he can work with people. i don't know why he's doing that. >> let me ask you this. the red line. i never understood the red line. we can bomb assad. i don't know if we know where the chemical weapons are, maybe we can, maybe we can't. we can bomb assad and there will be plat cal damage and we can use drones and surgical strikes and we can do all of that stuff and then we get more involved and, i don't know, why not allow the civil war and syria to continue. that's what it is. i know who the bad guys are. i don't know who the good guys are.
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i'm not sure there are any good guys. >> a lot of people say that's one strategy and this is a proxy war and you see hezbollah and president bashar al a zad and al qaeda and different gups coming. general adris who is the moderate rebel commander and there are so many divisions amongst the rebels that they're some of the more extreme elements. obama's biggest flaw, not just in syria and also in egypt is he's not living up to u.s. law. there's a coup in egypt and we're not suspending the aid. and you think president bashar al assad is acting in defiance. he knows he's cautious and so when obama in that exclusive cnn interview says that, you know, people are criticizing me for not taking immediate action, 100,000 people have died. you know, the regional stability is falling apart. let me just go around. we don't have a lot of time. what's your quick take on this? >> i want to harken back to what
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you said about going it alone versus doing it with allies. >> the president got flack for what he did in libya, and i thought it was smart and here the problem is he's being reckless as ahmed said. he said there was a red line and now he's fumbling around. say what you mean and mean what you say. if you want to work behind the sceneses with allies to take action, do it, but it doesn't look like that's what he wants to be doing. >> think president obama is the perfect leader at this time. he has a leadership style and never doing a thing about it and that's the course here. what do we do here? we don't know who the good guys are in this? just like when we saw the soccer games in england. i don't know which team i'm for. >> i'll be honest with you, i'm a national security hawk, i guess, reagan guy, but i'm confounded by this whole situation and that's why i'm not attacking the president on this although i don't want him to have to wait for the united nations. i'm just not sure. i think this is different than libya. i'm just not sure what i want
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him to do or what the right thing to do is. >> doing nothing, inaction isn't an excuse for being cautious. when the world's super power speaks in these broad, very bold terms you to act on it. >> well, then we'll have to go after the chemical weapons and we'll have to find out, cia, whoever, go after it. >> strongly condemn them and you cannot go in and find them. >> i don't know where they are. >> assad is a stra teerjic enemy of the united states. and he's an active enemy of a stable lebanon and there are so many things that undermine humanitarian. >> i'm done defending him. that's for sure, and i'm trying to figure out what to do. our free market friday panel will stay with me for the rest of the show. cnbc's dominic chu is about to join us with tonight's other headlines including the verdict in the fort hood shooting case. good verdict.
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convicted on all counts. cnbc's dominic chu has that story and more for us. all right, dominic. >> that's right. nidal hasan found guilty on 13 counts of premeditated murder and 32 counts of attempted murder. that makes him eligible for the death penalty, but lawyers advising him think he wants to be put to death. he represented himself at the trial, and didn't even try to make a case for his innocence.
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the sentencing phase starts on monday. >> also huge wildfireses still burning outside yos empty national park in california. hundreds of people forced to evacuate their homes. businesses shut down as firefighters work to get that fire under control. governor jerry brown has declared a state of emergency there. and the big market story today, steve ballmer announcing he will retire from microsoft as its ceo at some point within the next 12 months and in a big insult to ballmer, the stock shot up on this news more than 7% on the day to finish it off, but experts say the list of internal candidates to replace ballmer is somewhat weak. so an outsider may be needed to help turn microsoft around, larry. is microsoft turnable around? it's got a lot of cash and a big operation. >> it's a large operation, right. >> they have heft. it doesn't necessarily mean they have quality. >> there are a lot of these tech companies that were huge beheem olths in their day, think about
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hp and microsoft that are trying to reinvent themselves to be something more in this new te technological age and remember, everything revolves around mobile platform, tabths and smartphones and microsoft is trying to do that and it will take some time whether or not a new guy can come in there and make them that much more relevant in an age of pc declines. >> i understand the betting is bill gates will not come back to microsoft, but he will be on the search committee. >> that's correct, the board of directors has convened to at least try to find a candidate now. bill gates is going to be part of that search committee to find who the successor is going to be. there is no indication that i've heard or anyone else has heard that he will actually be the next ceo again. so no talk on that front, but he will have a hand in picking who that person is going to be. dominic chu. we appreciate the update. >> speaker john boehner says he will block any effort to shut down the government this year and folks, he has the votes. greffer nor quist and the free market friday panel will be back
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welcome back to "the kudlow report." i'm larry kudlow. in this half hour, more and more cities and states say obama care is forcing them to cut government worker jobs and
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hours. obama care, turns out, is a bigger job killer than the budget sequester. tax migration, where to live. americans vote with their feet and their dollars. we'll show you the states that are getting the money and those that are losing it. first up this evening, president obama blaming republicans and rush limbaugh of all people for the budget impasse in congress. take a listen to the president talking about his republican colleagues on cnn. >> sometimes they say to me privately i agree with you, but i'm worried about a primary from, you know, somebody in the tea party back in my district or i'm worried about what rush limbaugh's going to say about me on the radio, and so you have to understand it's really difficult. >> as if president obama is at his absolute worse and plain silly earns, i hate to say that,
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but that's my view. boehner will be passing the continual resolution. that's boehner. he's got the story right and by the way, there's a powerful new conservative movement to delay obama care taxes and mandates and the gop frankly is in the driver's seat and obama is in trouble on this issue and he knows it. that's why he's messing around and blaming rush limbaugh. it's just a dumb diversion. let's bring in my pal, grover norquist, our free market friday panel, ahmed shihab aldin. and grover, good to have you back. >> boehner's conference call made it very clear. no government shutdown and they'll have a continuum resolution, and the interesting thing is, grover, delaying obama care, and not defunding obama care. i find that very interesting. what's your take on it? >> well, i think it's the
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correct strategy that baner is quite correct. first, protect the sequester numbers. don't let spending jump back up again. don't punch a hole in those budget caps that were won in 2011. second, what do we do about the train wreck which the democrats now agree, the train wreck of obama care and obama's giving delays to big businesses, delays to campaign contributorers and delays to the labor unions and delays to the insurance companies and what we say is why not delay the individual mandate for people for the american people, for small businesses ee because the president started to backpedal because of the failure of hisson bill and it's reasonable for him to say get your act together and we'll look at it again. >> ahmed, your take on this? >> at the end of the day, boehner seems to be drinking more merlot than he usually does. >> as in california wine.
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>> yeah. i think that's what he likes. that's what i hear. maybe more of it or less of it, this is an ill-advised step and i think the suspension makes more sense and the short-term solution in terms of not completely going ahead of it, but the 80 votes in the republican caucus that we saw or -- >> the 80 members signing that letter. >> 80 republican members signed that letter in round numbers. >> this is the defund crowd and risk of shutdown, but here's the thing. >> right. >> 153 or so wouldn't sign the letter. >> right. >> and that means -- that tells me, a, boehner has the votes in his own caucus to win this, and of course, b, he'll carry the house, and in fact, you were involved in this delay strategy that grover described earlier. do you all have the votes to stop the defunders? the defunders, i'm not against defunding it and i don't want to shut the government down and i don't want to have the debt ceiling impasse because i think this hurts the country and the
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gop. >> first, there are two reasons why to go with the delay strategy, and they are it's from a policy standpoint of the solution and it's from a public sentiment standpoint of the right solution and the fact is the exchanges are not ready and kevin cunihan is not a republican, a democrat that says i wish i had another year and there are so many problems because there have been so many delays because of the regulations. >> and the securities and the verification. >> if you want the exchanges to work you should want a one-year delay. and that's where the public is, too. the public doesn't want there to be fraud. the public doesn't want there to be privacy. they don't want a shutdown of the government and that's why it's a much more attractive strategy than shutting down the government. >> mark, does boehner have the whip hand here? >> and absolutely, he'll have obama behind him because you will never live to see obama care and no one will ever see
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it. president obama knows it's horrible and that's why he gave out 2,000 waivers and congress exempted themselves. remember like the staff looked like they would go on it and the government moved faster than ever in history to make sure they didn't have to go on it it. >> let me just ask you and clarify a point, do you believe that obama would actually give up his precious obama care? i thought he would rather march on syria before he does that. >> he'll pretend he's fighting for it, but as it gets toward the 2014 election and they'll put it off until 2015 and they'll realize why screw up the presidential election and put it off until 2017. it will be a disaster when it starts and they know that. >> grover, let me just come back to you. there is one open point and i think boehner has the whip hand, and i think they're playing their cards right, and greffer there is still some talk about defunding obama care and demutual funding and not even delaying. maybe delay, but there's still loose talk about the debt
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ceiling and grover, i've got to tell you on fiddling with the debt ceiling you lose me, buddy. you lose me. you lose wall street and you lose the international markets and you lose everybody. it's like committing political harry carey. >> what's interesting is people talk about defunding. i'm in favor of defunding obama care. i'm just not in favor of having that be the only thing on the table and closing the government down if you don't get that today. there's a letter written by a dozen senators and they said we promise never to vote for anybody budget bill, continuing resolution and appropriation unless it has a complete defunding now of obama care. >> but that's it. >> but, grover, much as i -- and i really respect senator ted cruz, and i agree with him on most issues and i agree with him on defunding, but that's an easy vote, grover.
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that's an easy vote. >> with the budget bill in the senate it's an easy vote, real easy. >> senators are not allowed to instruct house members. you should do our strategy, why don't you go do that. that's not having enthusiasm for ending and reducing and delaying obama care as much as possible, people don't appreciate what message they are giving be some else. >> i really quickly wanted to say that we can talk about theoretical arguments and there are divisions within the republican party and when we talk about defunding and even if the conversation is theoretical and it's not going happen and i disagreed that the president has ever signed that. larry, you know this. he's not going to agree with that. >> i think he'll never give up on it it, but i'll say this. the work thing i like about the defund sers the idea of getting rid of obama care all together. keep that hope alive. i do admire that, and i don't
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think strategically, no. let me change that, and i don't think tactically it's the right thing to do. on that sense, i think rubio and cruz and them are right. >> most conservatives are repealing obama care in theory and the thing is with the senate controlled by democrats. here's the difference between the house healetter and the hou letter signed by 80 republicans. it doesn't do what grover was talking about in the senate. >> if doesn't say that if you support anything other than defunding you're a bad guy. this is one of the things you want to push for and we'll support alternatives and we'll all come back. >> you signed the letter and grover, you're in the higgins letter and maybe you wrote the letter. that's the delay strategy which is picking up a lot of the support and things have changed in the last couple of weeks. >> because the obama care bite is starting to hit the public sector. this is interesting. it's actually turning out to be worst than the budget sequester. more and more local governments
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are announcing job cuts or/and reduced hours worked all because of obama care. we've got that story next up on "kudlow." hey! did you know that honey nut cheerios has oats that can help lower cholesterol? and it tastes good? sure does! wow. it's the honey, it makes it taste so... well, would you look at the time... what's the rush? be happy. be healthy.
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>> so remember all those warnings we heard about the budget cutting sequester? all of the jobs that would cut, but what's really happening out there is that obama care is forcing cities and states and counties to either slash government jobs or cut back on hours worked. "the washington post" blog entry details how hours have been cut sharply to avoid obama care costs from cities and counties from wisconsin to texas to virginia to right here in new jersey. so could it be that obama care is the real job killer? we continue now with our free market panel. ahmed shihad aldin, and mark simone of wor talk radio. okay. do you disagree with me? this came from a washington post blogger, so you know it's a liberal point of view. >> my question is why do you need to actually do this. why do you need to create more jobs at lower hourly rates and i don't understand that and i
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don't see the evidence people -- i remember seeing forever 21 and i understand they want to keep the manufacturing costs low, but this will harm the reputation. >> this is government. >> i understand. but isn't this going to harm their employes. >> they're going to cut employees. here's the thing, they're going to do both. they read carefully, reed wilson, and two things. they're cutting back on hours worked which have to pay the mandate and it costs them $10,000 per person more, but they are also, they are also cutting back on staff. it's both. >> listen, i mean, companies do care about their public reputation, but they care more about being solvent and in a competitive environment they have to have the rightis prices for their products and the only way to have right prices for their products is they do everything they can to maximize that. what do they have to do in this case? they need to move people to
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part-time jobs and they'll be forced to offer health coverage to. in the case of delta air lines. we know that delta air lines will have $100 billion of higher health costs and not all of that is due to obama care, and the big chunk at least the majority and two-thirds of it it is and it's supposed to be the big, bad sequester that was going abolish all of these jobs including government jobs. particularly government jobs. well, i don't think so. >> i think it's obama care. >> it's going to cost a lot of government jobs and it will cut government staff so finally some good came from obama care. >> that gives them an excuse to riff, in a sense, reduction and force. this is at the low. you see it more, i think, in the counties and the cities than you see. >> huge municipalities can't afford to survive this, imagine what this will do to companies and imagine what it will do to small business when it kicks in. nobody in the mainstream media
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in an interview with the president tell me why they gave out the 2,000 waivers. if it's so good why don't you exempt these countries? aren't you admitting that you're exempting them by giving them waivers? >> can i just go back? i want to violate the rules here. ovid. >> sure. >> i want to see a vote in the senate on delaying for one year obama care's individual mandate. i would love to see that, too. tactically, with all of these democrats running in red states i would like to see that vote. any chance of it? >> 60% of the people up in 2014 in the senate are democrats and it's two-thirds and harry reed controls the senate and he'll fight hard not to have that vote and mitch mcconnell is clever at getting the votes he wants to get through. >> i think you have a problem. i think if there's a vote in the senate, all right? the delay for one year wins and since mitch mcconnell is so much smaller than harry reed, i think
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you might wind up getting the last word. >> all i'm going to say is the delay approach is smarter than the defund approach. so i would advocate your approach and it makes more sense even from just an opticses perspective because people don't want to be seen as vindictive especially considering what happened in the last election. >> people vote with their feet and they also vote with their dollars when it comes to choosing a place to live. we'll show you a hot new study about tax migration. the three biggest winners are states, by the way, with republican governors. that's next up on "kudlow."
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>> for anyone who believes higher taxes help grow the economy, take a look at this. a new study from the tax foundation shows almost $100 billion in personal income migrated from new york, california, and illinois over the past ten years. not surprisingly, these are also the states with some of the highest tax rates in america. where will that money go? easy, it went to florida, arizona, and texas and those are states with little or no income taxes. owe will the blue states ever figure it out that lower taxes mean more growth. by the way, looking at this study, it turns out that eight of the top ten state that benefited from the income migration have republican governors? that is a fact. we are back. grover norquist, i didn't know
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grover was still there and we'll get you in here. what do you think of this study, grover norquist? what do we learn from this? >> well, in the next ten years you're going to see the two parts of the country move in different directions, the states you mentioned, illinois, california, new york, have all raised taxes in the last two years to avoid reforming their pensions and labor unions. the other states with states like wisconsin, north carolina, in addition to the -- to florida, texas, arizona, have been cutting taxes. so the republican states are cutting taxes and reforming government. the high tax now led by democrat governor states are not reforming government and they're raising taxes to avoid. do that for ten years and you have a lot more difference between loser states and winner states. >> i hate to be so blatantly
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political, but let's be blatantly political. >> lower taxes and lighter regulation and it sounds attractive, but as you know, no decision is made in a vacuum and no decision has moved into florida. as you know, but -- they have bad weather in florida and they have hurricanes, come on. >> you don't see the same migration patterns going to alaska where they have low tax rates. all i'm saying is you have to take that into consideration. however, in texas, for example, it's not the coincidence that in more than any other state they've created more jobs and i think that that is not a coincidence. >> mark simone, you're an expert on new yorkers. >> do you think new yorkers are moving to florida or texas or arizona just for the weather? >> no. taxes, i know plenty that have done it for that reason. if you tax something, you get less of it. tax smokers and you get less smokers. governor christie had a study
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that he lost $17 billion because of the high taxes in new jersey. this study showed new york lost 45 billion in ten years. there's some crazy statistic and something like 6,000 families in new york city pay 50% of the tax. so if you were to lose a hundred of them you would make a big difference in the revenue here. >> i don't think there's a purer example of the curve than this. you raise tax rates, they move away. i don't care, whether, whatever. >> last week i meet with a guy named travis young who has done a comprehensive study and he has the whole interactive map where you've probably talked to him and you can go county by county and show where the migration and the migration is going in every county and every state in the united states and it's very powerful and it shows exactly what you're talking about. >> grover, i have 20 seconds and art lafer himself moved from california to nashville, tennessee, where there's no income tax in tennessee.
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>> watch missouri where they're about to override the governor's veto of the tax cut there. north carolina, just cut taxes as well. >> i love that north carolina story. that guy is tough. >> thanks to my free market panel, amid, grover, you're also terrific. that's it for tonight's show. i'm larry kudlow. we'll be back with more free market economics on monday. from one of five lexus hybrids that's right for you, including the lexus es and ct hybrids. ♪ this is the pursuit of perfection. i put in the hourswhere i am today by luck. and built a strong reputation in the industry. i set goals and worked hard to meet them. i've made my success happen. so when it comes to my investments, i'm supposed to just hand it over to a broker and back away? that's not gonna happen.
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